Starting a business as a sole trader is simple, fast, and low-cost — ideal for getting up and running. But as your business grows, it might be time to consider a more structured setup.
Below are the key signs it could be time to make the switch to a Limited Company in Ireland:
1. You're Making Consistent Profits
🔧 Lower tax on profits – Sole traders pay income tax, USC, and PRSI on everything earned. LTD companies pay just 12.5% corporation tax on profits left in the company.
🔧 Better control over take-home income – You can draw a salary and leave profits in the company, reducing your personal tax bill.
🔧 Retain profits to reinvest – Great for long-term growth or saving for a rainy day.
💡 Example: If you're earning €40,000+ in profit each year, switching to LTD can bring a noticeable tax saving.
2. You Want Limited Liability Protection
🛡️ Separate legal identity – A LTD company is its own legal entity.
🛡️ Protection for your personal assets – If your business runs into trouble, your personal finances are generally protected.
🛡️ Peace of mind as the business grows – Especially useful when entering contracts, taking loans, or hiring staff.
💡 Example: If a client sues your business, a sole trader could lose personal savings — a company director is better protected.
3. You're Planning to Hire or Take on Investors
💼 Greater credibility – Clients and partners may prefer to deal with LTD companies.
💼 Easier to bring on partners – Shares can be issued or sold in future.
💼 Access to funding – Many grants and investors require a company structure.
💡 Example: An investor may ask for company equity — you can’t offer this as a sole trader.
4. You're Expanding Your Business Operations
📦 Scaling faster – A company structure supports bigger ambitions.
📦 International growth – Some global companies only contract with LTDs.
📦 Better business image – On invoices, documents, and tenders.
💡 Example: If you're targeting corporate clients or public contracts, a LTD structure looks more professional and trustworthy.
5. You're Thinking About the Long Term
📈 Succession planning – A company can be passed on, sold, or transferred.
📈 Selling the business – Shares make it easier to sell your business later.
📈 Defined structure – Useful if you plan to eventually step away.
💡 Example: A sole trader business ends when you retire. A LTD company can continue without you.
Final Thoughts
Becoming a Limited Company isn’t right for everyone — but if your profits are growing, your risks are rising, or you’re planning to scale, it might be time to make the switch.
At Gahan Accountants, we help sole traders:
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Review their setup
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Weigh tax implications
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Set up LTD companies the right way
✅ “For detailed information on registering your new limited company with Revenue, including required forms and procedures - https://www.revenue.ie/en/starting-a-business/registering-for-tax/how-to-register-for-tax-as-a-new-company.aspx
📞 Want to Know If It’s Time?
Book a consultation with Gahan Accountants - https://gahanaccountants.ie/pages/contact
